Retail reporter

Wesfarmers chief Richard Goyder says he has faced ''incredibly pessimistic'' sentiment in Australia since returning last month from the World Economic Forum in Davos, with the recent spate of factory closures and job losses masking a resilient economy.

''In January I left Davos feeling really good about the world, having been there for a week and people were talking up the US economy, being pretty satisfied where Europe was and satisfied where the rest of the world was, and I've come back to Australia to incredibly pessimistic sentiment and I can't reconcile the two, to be frank,'' he said.

Mr Goyder is chairing the B20 business taskforce that brings together Australia's business and CEO elite to work on recommendations ahead of this year's G20 meeting in Brisbane. He stopped short of calling Australians ''whingers'' but said pessimism was being overplayed.

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''I think consumer sentiment is still somewhat fragile and I think we all need to be careful that we don't inadvertently, or otherwise, talk it down when the bottom line is, I

think, Australia is still very well placed economically.

''You have got superannuation funds that will be performing well, people's wealth increasing as housing prices move up, employment is still generally strong, interest rates are low and we all have to be careful we don't get ourselves into a downward spiral … it's not helpful.

''I just think sometimes we have all got to realise we are not in a bad place.''

Wesfarmers shareholders at least have something to be chirpy about after Mr Goyder showered them with their biggest increase in interim dividends in four years as he reported an 11.2 per cent lift in December-half profit for the Perth-based conglomerate to $1.43 billion, beating market expectations.

The interim dividend was bulked up by 10.4 per cent to 85¢ per share, from 77¢ per share last year.

Wesfarmers' strong half-year result was built around a 4 per cent increase in revenue to $31.8 billion, which was also ahead of analyst expectations.

Once again it was Wesfarmers' powerhouse retail chains Coles, Bunnings, Officeworks and Kmart that shouldered much of the earnings improvement.

Target remains the problem child for Wesfarmers, with its 52.7 per cent slide in divisional earnings to $70 million wiping out the $14 million rise in earnings to $260 million by Kmart.

Target had its earnings clipped by an overhang of inventory which forced a fire sale, while high levels of seasonal clothing delayed the launch of the spring and summer collections.

Target boss Stuart Machin said his team were ''in the guts'' of a restructure, with the company tipping higher earnings in the second half than for the same time last year.

Its flagship Coles business powered ahead with a 10.7 per cent lift in earnings to $836 million as return on capital rose 80 basis points to 10 per cent.

The Bunnings chain showed no signs of suffering any serious earnings damage from the aggressive rollout of Woolworths' hardware chain Masters, with earnings up a robust 8.5 per cent to $562 million, although margins were saved by its own accelerated store rollout and price cuts.